The Australian dollar is down against its US counterpart which has enjoyed a rally as more strong US economic data prompts positive sentiment.

At 0635 AEDT on Wednesday, the Australian dollar was worth 76.15 US cents, down from 76.38 US cents on Tuesday.

Westpac said more US economic data and jobs data confirmed stronger growth in the second quarter.

“The service sector PMIs (were) resoundingly strong, while job openings hit record highs…Markit’s final May PMI saw a notable upward revision too, to 56.8 from a preliminary read of 55.7 – a three-year high. (and) US job openings in the Job Openings and Labor Turnover Survey rose to a record high 6.7 million in April.”

However, the US dollar index ended up going backwards, they said.

“The US dollar index is down 0.1 per cent on the day,” its analysts said in a Wednesday morning note.

“The AUD fell from 0.7650 to 0.7595 before consolidating.”

But Westpac believed the local currency should move higher on Wednesday, although analysts urged caution with gross domestic product data due out at 11.30 am AEST.

“Recent economic data has been supportive, and momentum is positive, arguing for a higher AUD towards 0.7700 if risk sentiment remains upbeat. Today’s GDP data poses significant event risk.”

The Aussie dollar is also down against the yen and the euro.

One Australian dollar buys 83.60 Japanese yen, from 83.85 yen and 65.00 euro cents, from 65.26 euro cents.

AAP

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